Group Lease Plc (GL), a company listed on the Stock Exchange of Thailand that chiefly provides loans for vehicle purchases, is acquiring a 71.9 percent stake in a microfinance lender in Burma.

Burma is GL’s fifth market in the Association of Southeast Asian Nations (ASEAN). Others are Thailand, Cambodia, Laos and Indonesia.

GL Holdings (GLH), GL’s holding company based in Singapore, is taking over the controlling stake in BG Microfinance Myanmar from B.G. International Pte Ltd, a Sri Lanka-based holding company and an affiliate of Commercial Credit & Finance Plc, said GL chairman and chief executive Mitsuji Konoshita, who did not reveal the value of the deal.

The takeover is pending due diligence and profits from the Burmese operations are expected to be consolidated into GL’s financial statements starting from the fourth quarter, he said.

Upon the transaction’s completion, Commercial Credit & Finance will retain its 28.1 percent stake in the Burmese company.

BG Microfinance Myanmar’s lending portfolio amounts to US$1 million and is projected to increase to $40 million in 2017.

Although the Burmese company is considered to be a small firm, its operations are quite profitable, churning out $20,000 profit per month, he said. Monthly profit is expected to shoot up tenfold to $200,000 when its lending portfolio reaches $30-40 million.

The latest takeover in Burma is seen as a boon for GL, especially in the medium and long term.

Related Stories

GL recently announced a record-high second-quarter net profit of 256 million baht ($7.38 million), bringing its first-half profit to 478 million baht ($13.8 million). It will use acquisitions and joint ventures to rapidly expand its foothold in ASEAN.

The company said in a statement that its target to double last year’s roughly 500 million baht ($14.4 million) net profit to 1 billion baht this year now appears increasingly realistic.

In another development, GL said its hire purchase portfolio in Thailand will be reduced to 10 percent in 2018 from 40 percent currently, while Indonesia will be the largest portfolio followed by Cambodia.